Big banks blamed for school funding cuts in Minneapolis

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MINNEAPOLIS - A Twin Cities neighborhood action group is blaming big banks for costing Minneapolis schools millions in state funding. The group, Neighborhoods Organizing for Change (NOC), linked home foreclosures to per-pupil funding.

"Wells Fargo's share of what it costs the Minneapolis Public Schools is $28 million," said Steve Fletcher, Executive Director of NOC. "I would like to see Wells Fargo write a $28 million check to the Minneapolis Public Schools. That would be a really good start. I would also like to see them agree to mediation for everybody facing foreclosure and I would like to see them start thinking about writing down principal to really adjust where the market is."

The NOC report contends that Wells Fargo was responsible for more than 300 home foreclosures in Minneapolis in the last year. US Bank is linked to more than 200 foreclosures in the same time period. The NOC report also notes that Minneapolis schools lost an estimated 4,000 students since 2006 resulting in a loss of almost $150 million in state funding.

A US Bank spokesperson said she doubts the accuracy of the NOC figures about US Bank foreclosures, contending that, in many foreclosures, US Bank was only acting as a "trustee" for the property.

Wells Fargo, in a written statement, insisted "Wells Fargo's priority is to prevent as many foreclosures as possible by working directly with financially distressed customers. We will continue to work with borrowers on mortgage modifications and other options that can help them remain in their homes and avoid foreclosure when possible."

Fletcher insisted that big banks should be accountable for the foreclosure problems in Minneapolis and their effect on schools. "We are relying on a multi-national bank to make decisions about what happens in our community and that is not how it should be," Fletcher added.

Fletcher said that NOC would be present at Tuesday's Minneapolis School Board meeting to ask the board to move their money out of Wells Fargo. Fletcher insisted that Wells Fargo was the biggest offender in the foreclosure problem locally "and that is why we are focusing on them." He said his group wants the district to use community banks instead.

Minneapolis Public Schools representatives told KARE 11 they were still studying the NOC statements for accuracy about school attendance and had no comment at this time.